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London stocks jump as retailers set to reopen from shutdown

Published 01/06/2020, 08:28
Updated 01/06/2020, 09:25
© Reuters. FILE PHOTO: A street cleaning operative walks past the London Stock Exchange Group building in the City of London financial district, whilst British stocks tumble as investors fear that the coronavirus outbreak could stall the global economy, in London
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By Sagarika Jaisinghani

(Reuters) - London-listed shares rose more than 1% on Monday as retailers prepared to reopen stores following a months-long coronavirus-led lockdown, with Primark's owner pushing ahead to restart all its England shops on June 15.

Associated British Foods (L:ABF), owner of the fashion retailer, jumped 6.4% to the top of the FTSE 100 and the wider retailer index (FTNMX5370) added 0.8%.

The blue-chip FTSE 100 (FTSE) rose 1.6%, after ending May on a downbeat note on fears of a strong U.S. response to China's move to impose a national security law in Hong Kong. But global equity markets rallied on Monday as U.S. President Donald Trump made no mention of pulling out of the Phase 1 trade deal while saying his administration would begin the process of eliminating special treatment for Hong Kong.

The domestically focussed mid-cap index (FTMC) was up 1.5%, building on a strong two-month rally that has been powered by hopes the UK economy would rebound from a looming coronavirus-fuelled global recession.

"Re-opening optimism reigns supreme as markets have temporarily shelved the U.S.-China trade war escalation playbooks in favour of the bullish-for-market re-opening scripts," said Stephen Innes, markets strategist at Axicorp.

The FTSE 100 has recovered about 26% since crashing to an eight-year low in March, with battered travel (FTNMX5750) and mining (FTNMX1770) stocks posting some of the sharpest gains.

AstraZeneca (L:AZN) rose 1.4% and was among the biggest boosts to the FTSE 100 after its and U.S. drugmaker Merck & Co Inc's (N:MRK) cancer drug received a positive recommendation from the European Medicines Agency as a maintenance treatment for a form of pancreatic cancer.

© Reuters. FILE PHOTO: A street cleaning operative walks past the London Stock Exchange Group building in the City of London financial district, whilst British stocks tumble as investors fear that the coronavirus outbreak could stall the global economy, in London

But Ted Baker (L:TED) slumped 10.2%. The fashion brand said it would raise 95 million pounds ($117.84 million) through a stock issue to help it ride out the coronavirus crisis, after reporting a loss of 79.9 million pounds for the year to January.

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